The days of paper invoices continue to decline, as electronic invoicing proliferates. In 2011, the use of e-invoicing jumped by 20 percent, according to an estimate from Basware and Billentis. One reason for the growth is legislation mandating or encouraging its use in several countries, including Finland and Mexico. In the U.S., the Department of the Treasury last year announced that it was "mandating that all Treasury Bureaus implement the Internet Payment Platform (IPP), an electronic invoice processing solution, by the end of fiscal year 2012. Additionally, in fiscal year 2013, Treasury will require that its commercial vendors submit their invoices using IPP."
The Treasury says that adopting IPP across just that department will save $7 million annually. If IPP were adopted across the Federal government, the savings would hit $450 million annually, the U.S. Treasury estimated.
E-invoicing's ability to provide greater visibility into cash flow also is contributing to its increasing popularity. A November 2011 report by Basware, "Cost of Control: Fuzzy Finance," found that more than two-thirds of businesses believe that greater use of electronic invoicing would boost cash flow visibility. Additionally, more than half of respondents said they planned to invest in e-invoicing technology.
Despite the growth in electronic invoicing, respondents to the report identified shortcomings in their systems integration and technology. More than four in five said that neither their supplier payments, nor customer invoicing and payments functions were fully optimized.
Another report, also by Basware, along with the Institute of Financial Operations, and released in September 2011, indicated that three-fourths of companies receive electronic invoices as emailed PDFs, while half of companies actually print out e-invoices for processing. Of course, neither of these can be considered truly automated systems, although they're definitely ahead of paper invoices that arrive via the mail.
And, even as automated systems grow, paper isn't completely out of the payments picture, although its use continues to drop. Checks accounted for 16 percent of all non-cash global transactions in 2009. That's still represents about one in six transactions, although it's down from 22 percent in 2005, according to the World Payments Report 2011 by CapGemini, RBS and Efma, a non-profit financial services organization.